Prologis Raises FY2025 Outlook Amid Record Build-to-Suit Starts and Data Center Growth

Prologis reported Q2 2025 earnings with core FFO of $1.46 per share and occupancy at 95.1%. The company raised core FFO guidance to $5.75-$5.85 per share for FY2025 and increased development start guidance to $2.25-$2.75 billion for 2025. Record leasing pipeline and robust build-to-suit and data center momentum indicate resilience and strategic positioning for long-term growth.

Title: Prologis Reports Strong Q2 2025 Earnings, Raises Full-Year Guidance

Prologis, Inc. (PLD) reported its second-quarter 2025 earnings on July 16, 2025, with core funds from operations (FFO) of $1.46 per share, exceeding internal forecasts. The company's occupancy rate ended the quarter at 95.1%, outperforming the broader market by 290 basis points [1].

Key highlights from the earnings call included:

- Core FFO: Core FFO, including promote income, was $1.46 per share, while excluding net promotes, it was $1.47 per share.
- Occupancy: Occupancy ended at 95.1%, down 10% sequentially, widening Prologis' outperformance over the market.
- Rent Change: Prologis monetized an additional $75 million of net operating income (NOI) through rent change, with a net effective basis of 53% and a cash basis of 35%.
- Lease Mark to Market: The lease mark-to-market stood at 22%, indicating future embedded rent growth potential.
- Development Starts: The company initiated over $900 million in new development, with nearly 65% of projects being build-to-suit.
- Data Center Expansion: $300 million of development starts related to incremental data center investment in Austin, Texas, with a top hyperscaler.
- Power Procurement: Prologis secured an additional 200 megawatts, raising the total in advanced stages to 2.2 gigawatts as of quarter-end.
- Energy Platform Progress: The company had nearly 1.1 gigawatts of solar production and storage in operation or under development as of quarter-end, approaching the one gigawatt year-end goal.
- Financing and Liquidity: Prologis closed $5.8 billion in financing, including a $3 billion global credit line recast at a reduced spread, and held over $7 billion in liquidity at quarter-end.

The company also provided updated guidance for the full year 2025:

- Core FFO: Projected at $5.75-$5.85 per share, including net promote expense, and $5.80-$5.85 per share, excluding net promote expense.
- Development Starts: Increased to $2.25-$2.75 billion at company share for full year 2025.
- Strategic Capital Revenue: Raised to $570-$590 million.
- Same-Store NOI Growth: Projected at 3.75%-4.25% (net effective) and 4.25%-4.75% (cash) for the full year.

Prologis' strong Q2 performance and robust guidance indicate resilience and strategic positioning for long-term growth, driven by a diverse and expanding leasing pipeline, significant build-to-suit and data center momentum, and a focus on power procurement and energy platform progress.

References:
[1] https://www.fool.com/earnings/call-transcripts/2025/07/16/prologis-pld-q2-2025-earnings-call-transcript/